India’s Retail Inflation Rises to Three-Month High of 1.33 Percent in December

India’s retail inflation rate has risen to a three-month high of 1.33% in December, based on figures published by the Ministry of Statistics on Monday. In December, food costs fell 2.71% annually (year-on-year), moderating from a steeper drop of 3.91% in November.

The pace of price declines for vegetables slowed, even if they kept falling. In December, prices fell 18.47% year-over-year, as opposed to a bigger 22.20% decline in November.

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The increase in retail inflation to 1.33% does not immediately result in higher household expenditures and stays below the RBI’s target range, according to the reports. Food costs, particularly for vegetables, are still significantly lower than a year ago.

As stated above, for the fourth month in a row, December’s retail inflation remained below the Reserve Bank of India’s lower tolerance level. The government has ordered the central bank to maintain inflation at 4% with a 2% margin on each side (i.e., between 2% and 6%).

In November, inflation was 0.71%. In September, the previous high was 1.44%. The food inflation, which is based on the Consumer Price Index (CPI), was still negative at (-) 2.71%, albeit higher than November’s (-) 3.91%. This is the seventh straight month that food inflation has been negative. As a consumer, it is important for all of us to understand the recent inflation rates.